FIRB scrutiny to fall under ALP plan

Speaking at a trade forum last week, Labor Shadow Trade Minister Penny Wong unveiled her party’s pledge to reverse measures implemented by the federal Coalition that tighten the FIRB’s monitoring of foreign investment in the farm and food sectors.

Senator Wong said Labor wanted to make Australia a more attractive investment destination and support local jobs by liberalising the FIRB’s screening thresholds, given the nation’s reliance on foreign capital, to grow the farm sector.

She said the Abbott-Turnbull government had imposed new screening thresholds of $55 million for agribusiness investments and a $15m cumulative measure on agricultural land.

“These changes have been the subject of widespread criticism from business, including the Business Council of Australia (and) Australian Food and Grocery Council,” she said.

But Senator Wong said, if elected, Labor would increase FIRB screening on agricultural land purchases from $15m to $50m, non-cumulative, to bring all investors into line with thresholds applied under the Howard government’s trade agreements with Singapore and Thailand.

She said the ALP would also remove the agribusiness screening category of $55m in the FIRB’s current scrutiny regime and review its “discriminatory” treatment of investments in non-sensitive sectors by investors from Singapore, Thailand and non-Free Trade Agreement trading partners.

“Under Labor, all proposed investments by foreign governments and State-owned enterprises will continue to be subject to FIRB screening, regardless of value,” she said.

But a spokesperson for Agriculture and Water Resources Minister Barnaby Joyce said Labor’s proposal showed a “complete lack of understanding” of Australian agriculture, in suggesting a $50m threshold before any FIRB scrutiny was applied to farmland investments.

Mr Joyce’s office provided examples of recent farmland sales that wouldn’t face any regulatory scrutiny under the ALP’s plan to reverse FIRB scrutiny measures, introduced by the Coalition.

That included; a Chinese investor’s purchase of the 705,700 hectare “Wollogorang” and “Wentworth” cattle stations in the NT Gulf country for $47 million in 2015; a Filipino investor’s purchase of the 560,000 hectare “Murray Downs” station and 265,000 hectare “Epenarra Station” for $20 million in the NT in 2015; and a Hong Kong investor’s purchase of 68,000 hectares of cropping farms in WA in 2015-16 for $35 million.

“Under the Coalition reforms, this needed FIRB scrutiny; under Labor, there would be none,” the spokesperson said.

“These are significant areas of Australian agricultural land, each purchased for under Labor’s proposed threshold of $50m.

“Does Labor think there should in effect be no scrutiny of Australian agricultural land by foreign interests?

“It would seem so.

“Labor also shows complete disregard for the clear wishes of the Australian people that the Australian government have proper oversight of foreign investment in our agricultural land and assets, so they can have proper confidence that such foreign investment is in the national interest.”

Mr Joyce’s spokesperson said Labor also proposed a non-cumulative threshold which meant a foreign investor could just keep buying properties under $50m without ever being scrutinised by the Australian government.

“The Coalition’s reform which lowered the threshold to $15m for agricultural land, effective from March 1, 2015, is a properly balanced approach,” the spokesperson said.

“$15m was chosen as an appropriate level to capture larger purchases - also the cumulative factor prevents a series of lower cost purchases never being scrutinised.”

In April, Labor leader Bill Shorten was asked about his party’s views on the proposed sale of the Kidman & Co cattle empire to foreign investors for about $370m which the Coalition has rejected.

Mr Shorten said on one hand Labor was “very committed” to Australia being a strong trading nation with good flows of foreign investment, which helped generate local jobs.

But he said “on the other hand, you've got to make sure that Australian assets which are sold are in the national interest”.

Mr Shorten said Labor wanted to be briefed by the federal government on the entire Kidman deal.

“We don't know the whole deal, but I have a general reservation about just putting everything up on the market to sell everything,” he said.

“It makes me feel uneasy.”

Senator Wong said Labor would also seek to free-up global trade in agriculture and eliminate market-distorting subsidies for farm goods.